The airways of mice deficient in the cAMP phosphodiesterase PDE4D gene are refractory to muscarinic cholinergic stimulation. This study was undertaken to determine whether altered smooth muscle contractility causes the PDE4D-/- phenotype. A major disruption in contractility was observed in isolated PDE4D-/- tracheas, with a 60% reduction in maximal tension and a fivefold decrease in sensitivity to muscarinic cholinergic agonists. Conversely, responses to KCl or arginine vasopressin were unaffected. PDE4D is the predominant PDE4 form in tracheal extracts and PDE4D mRNA is expressed in smooth muscle where muscarinic binding sites are most abundant. Cyclic AMP accumulation in response to acute G(s)alpha-coupled receptor stimulation was increased up to fourfold in the airway of PDE4D-/- mice when compared with wild-type. This increase in cAMP was associated with an increased sensitivity to PGE2-induced relaxation of the PDE4D-/-tracheas. Furthermore, a blockade of prostanoid accumulation in PDE4D-/- tracheas restored the response to muscarinic cholinergic stimulation in vitro and in vivo. These results demonstrate that PDE4D plays a key role in balancing relaxant and contracting cues in airway smooth muscle, suggesting that natural mutations in the PDE4D gene have profound effects on airway tone.